Print media deal failed: Next Media

SPECULATION:：Local media reported yesterday that the deal may have fallen through because the Want Want China Holdings chairman wanted to avoid antitrust inquiries

By Camaron Kao / Staff reporter, with Bloomberg

Wed, Mar 27, 2013 - Page 1

Next Media Ltd (壹傳媒), controlled by billionaire Jimmy Lai (黎智英), said a plan to sell its print business in Taiwan has fallen through.

Based on the buyout contract for the NT$16 billion (US$536 million) deal, either the buyer or seller can cancel the deal if the transaction cannot be completed by today. The deal, which is currently being reviewed by the Fair Trade Commission (FTC), cannot proceed until the regulatory review has been completed.

An option to extend the sale agreement for assets that include the Taipei-based Apple Daily newspaper would not be taken up, Next Media’s spokesman Mark Simon said yesterday in a telephone interview, without elaborating.

The plan to sell its lossmaking television assets in Taiwan, which include Next TV, for NT$1.5 billion is still ongoing, he said.

“Next Media is going back to the print business in Taiwan,” Simon said.

Based on the deal, Formosa Plastics Group (FPG, 台塑集團) chairman William Wong (王文淵) would acquire 34 percent of Next Media’s print assets, followed by Want Want China Times Group (旺旺中時集團) president Tsai Shao-chung (蔡紹中) with 32 percent, Chinatrust Charity Foundation (中信慈善基金會) chairman Jeffrey Koo Jr (辜仲諒) with 20 percent and Lung Yen Life Service Corp (龍巖集團) chairman David Lee (李世聰) with 14 percent.

Local media reported yesterday that the deal may fall through because Want Want China Holdings Ltd (中國旺旺控股) chairman Tsai Eng-meng (蔡衍明), father of Tsai Shao-chung, sought to pare the stake purchase to avoid antitrust queries into the family’s media ownership.

An official from FPG, who declined to be named, said yesterday it is impossible for the company to take up more shares released by Tsai because the company is not a major player in the deal.

FPG would issue an official statement on the deal within two days, and no further information could be confirmed, the official said.

The official said Next Media has the right to withdraw from the deal based on the contract, and he thought it would be difficult for the Fair Trade Commission to approve the buyout given the public’s opposition to the plan.

However, the commission yesterday said it had contacted all the relevant lawyers in the Next Media deal and no one wanted to withdraw from the review process.

“All comments and reports about the deal are speculation, in our view,” FTC spokesman Sun Lih-chyun (孫立群) said by telephone. He said the commission would continue the review process unless any applicant filed for withdrawal.

The commission began the review process on March 8 and it is set to be completed by April 6. The commission can extend the review process to May 6 if it deems it necessary, Sun said.

Protesters against the deal in January called on Taiwan’s regulators to block the sale of Next Media’s Taiwan in assets to local tycoons to prevent the concentration of media interests.

Want Want China Times Group controls the Chinese-language Commercial Times newspaper, the CtiTV news channel and at least five other media outlets in Taiwan.

A potential integration of the Apple Daily and China Times would have a market share exceeding 45 percent of Taiwan’s newspaper market, according to National Chung Cheng University associate professor Kuang Chung-hsiang (管中祥).

Tsai Shao-chung’s US$2.4 billion purchase of cable operator China Network Systems Co (中嘉網路) is still subject to approval from the National Communications Commission, which said on Feb. 21 the purchaser had not fulfilled its conditions.